In an exclusive interview, Ian Kerr, vice-president of business transformation at Canada Post, offers Electric Autonomy Canada a backstage look at the corporation’s new $1-billion commitment to electrify its 14,000-vehicle fleet
Earlier this month, Canada Post made a surprise announcement: it would be spending $1-billion to achieve half-electrification of its 14,000-vehicle fleet by 2030, with full electrification by 2040.
While Canada Post has been testing low- and zero-emission vehicles in its fleet for a decade, the Crown corporation has made almost no mention of its tentative steps towards reducing its carbon footprint.
But now, with a holistic, company-wide net-zero emissions plan in place that encompasses cleaning up everything from buildings to vehicles to waste, Canada Post is ready to talk.
Electric Autonomy Canada sat down with Canada Post’s vice-president of business transformation, Ian Kerr, to get the inside track on how and why the company plotted its roadmap to zero emissions and how it plans to execute it.
The following interview has been edited for length and clarity.
Canada Post delivers its ZEV strategy
Electric Autonomy Canada: What does a fleet transformation on this scale mean for Canada Post in terms of its future security and brand identity?
Ian Kerr: We see this as something very much as a stronger purpose — a stronger Canada delivered. Given that we deliver to all Canadians we’ve touched every community and we know we’re an iconic Canadian brand and company. We need to represent the people we serve. Clearly by our government’s goals and by society’s aspirations, as Canadians, we want to demonstrate we’re moving to a carbon neutral future as part of our environmental impact agenda. So, we think this is very fitting for who we are and who we represent. Even you, you’re one of my customers and so we’ve got to be representative of who you want us to be.
Electric Autonomy: A large part of electrification is driven by the government mandates. What is driving Canada Post to electrify its fleet?
Ian Kerr: A lot of this we would do, even if it wasn’t government mandated to do it. That’s something we’ve been searching out as to what our identity needs to be. So, it certainly has the government mandate backing, but it also has the backing of our bargaining agents and our employees as well. When people are now looking at e-commerce and e-commerce shipping, more and more people have a concern on the environmental impact of their online purchases. So, given that the direct customers of our business are looking for us to demonstrate that we are reducing our impact on the environment and that some of the commerce companies and small businesses in Canada, their own brand identity is about being eco-friendly, they want to work with companies that have the same agenda. So it plays on it from multiple angles. It’s not simply a government angle.
Electric Autonomy: How did you measure that a zero-emission fleet is what your customers were looking for? How did you get that feedback?
Ian Kerr: We did do surveys with a lot of market research. But obviously we hear directly from many of the small businesses as to what their current and future priorities are. And I would say from our research [electrification] is a fast-emerging priority. They’re still looking for costs and service, but we see the differentiators on the horizon being more around, not just the customer experience, but the whole holistic experience including the environmental side. And that goes up to the carbon footprint from the packaging and waste as well.
Electric Autonomy: So Canada Post is putting a billion dollars is being put towards entire “environmental package,” which ranges from the procurement of electric fleet vehicles to eco-friendly buildings. How is that going to impact costs for customers or Canada Post’s bottom line going forward? How did Canada Post calculate the investment-reward equation?
Ian Kerr: We’re putting in a bid upfront, playing a long game. With buildings hopefully they reduce energy consumption, so that will pay. Your buildings will also have a longevity to them. And, with vehicles, we built up quite a detailed total-cost-of-ownership model to really study what it means to move to an electric, zero-emission fleet. We started with the NRCan model and then we layered on top of that a lot more parameters. We have a number of different sizes of vehicles, so we modelled it for each type of vehicle — you have to model it for your business.
Electric Autonomy: And what is the duty cycle for most of the Canada Post fleet? How much do most of your delivery vehicles work in a day?
Ian Kerr: This is the paradox and this is why the total-cost-of-ownership models need to be customized to the business. Put very simply, our value isn’t when we are delivering at your door, our value is not driving down your street. Our most efficient operations have the least mileage. We typically only deliver a range of 30 to 40 kilometres a day. That’s that’s very different from FedEx and UPS, who will be looking more like 120 km per day. So this is the difference: postal delivery has high density and courier delivery has lower density. A lot of the current market vehicles on the market are aimed at the couriers and not at postal. We’re experimenting with different vehicle types and ultimately we probably will be looking at a vehicle with a custom battery pack. We don’t need an oversize battery — we have no interest in a 300-km-range battery. Part of our development phase is going to be to optimize the vehicle solution.
Electric Autonomy: That’s interesting, because on the consumer side all that drivers say they want is the biggest, longest-distance battery and sometimes bigger isn’t better. In the vein of lessons learned, is there anything else from this process that you think is valuable for other fleets to know about transitioning?
Ian Kerr: You need to develop your own custom ownership model that relates to your business, especially as a fleet operator. So that is number one. Number two is the challenge of infrastructure that has come out loud and clear from companies that have many facilities — post offices and depots — that need to put in charging infrastructure. I think we’re learning that, strategically, getting the deployment of the charging infrastructure ahead of the vehicle deployment is going to be one of our most complex challenges.
Electric Autonomy: Finally, why did Canada Post keep these plans so quiet? Most other companies can’t wait to stick their hand up to say, “Look what we are doing.”
Ian Kerr: We are Crown corporation and we have seen many other companies post those claims of their commitments to low emissions or electrification. Given the nature of who we are, we wanted to be sure we had a truly executable plan that we could deliver before we went public. A Crown corporation is accountable to the government and to the public. So, we’re not going to make some bold statements if we can’t back it up. There has been a ton of work behind the scenes before going public because we wanted to know we could deliver.